Amortization refers to the process of spreading out a loan into a series of fixed payments over a specified period of time. Each payment covers both principal and interest, resulting in the gradual reduction of the loan balance.
Principal and Interest (P&I) refers to the two main components of a loan payment. The principal repayment decreases the loan balance, while the interest is the cost of borrowing the money.
A seasoned loan is a bond or mortgage on which several payments have been collected. These types of loans are considered lower risk and more marketable than newly issued loans.
